Carl Icahn Graduation Speech Transcript:
We today are in a crisis in our economy.I believe,I know you’ve been studyingthis,we have a lot of problems.One of our major problems in this country is managementand their ability to compete. With exceptions we have terrible management in this country.
The system is dysfunctional. I can tell you
how bad our boards are, with exceptions of course. I sit on a lot of boards.
I don’t have to watch Saturday Night Liveanymore;I just go to the board meetings. I will tell you,
it’s a sad commentary, that we have an inabilityto compete.
You can blame unions to some extentbut the real problem is that there’s a symbiotic relationship between boards and C.E.O’s today. As a result, there is no way to hold these guys accountable exceptif somebody like myself comes along, or some other person, who’s really well to challenge them but you have to go through contortions.There’s nocorporate democracyso you have to go through contortionsto even challenge these guys.
It’s again a sad commentary, the way you get to be a C.E.O. Don’t get into the mold most C.E.O’s get intoto get elected.I call it “Anti-Darwinian.” I call it “anti-survivalof the fittest”when you see these guys run these companies today for the most part, with a number of exceptions.
They’re like thefraternity president at college. I’m sure there’s somebody out there that isa fraternitypresident so I’m not telling you all of them are bad guys. I remember in college the fraternity president is the kind likable guy that is always at the frat house.He’d always be there and if you went over there you wonderedif he ever studiedbecause whenever you were feeling down, whenever you wantedto shoot a little pool, have a drink,your girlfriend didn’t show up for something, you could go overand he was there.
“How are you doing Carl?What’s going on?” “You know,my girlfriend didn’t come.” “Oh, you can’t trust any of them.” It’s the usual conversation.You go,“That’s great,yes, thank you.” You like the guy and you play alittle pool, have adrink with him and obviouslywhen it came time to get elected to be aa frat president,you’d say “Great.” and you’d vote for him.
This guygoes on to the world of business. He’s a likable guy, maybe not too bright, maybe even a buffoon but likable. Also he’s a good political guy because there is always competition to be the head of the club. He’s good politically so he has all these qualifications. He doesn’t make waves. He understands being a survivor and he moves up the corporate ladder.
This is what we have today.They move up the corporate ladder. They don’t make waves, not a threat to the guy above themand they just keep moving up and up. They never had many ideasbut just were there.
So this doesn’t help corporations very much.It doesn’t help usbe competitive. They’re the wrong people that show up today in our companies.He just keepsmoving up the ladder.
The board really doesn’t care because the board goes and gets their check. The look at it, they see a bunch of graphs. The light is pretty bad,a lot redlines,green lines, yellow lines,all going up. There’s always something going up.You’ve got some line going up no matter how bad the company is. All these lies and I used to sit thereI’m color blind i don’t evenunderstand what the darn lines are. I don’t think anybody does and they always have that.That’s what goes on at your board meetingsand the C.E.O. shows it with a smile. Sometimes you say to theC.E.O. “How come we’re losing all this money and this red line is going up?”He says “Well you see, that’s the line that we estimated ninety…blah blahblah [gibberish] all good, whatever,you’re doing a good job. We’llhave dinner tonight. We’re going out. We’ve got theater tickets. Okayhere’s your check.”
That’s why you have the problem in derivatives today and you have all these headaches because theguys literally don’t know how to run the company.
He’s a survivor. As a survivor he’s not going to have a number two guy underneathhim that’s smarter than him. He doesn’t want a guy that can challenge him because,god forbid, somebody on the board should meet the number two guy. He moving up and up the ladder until he becomes number two to the C.E.O. Sooner or later the C.E.O. retires.
The C.E.O. puts him there because the C.E.O. realized this guy is not a challenge.He’s a little dumber than the C.E.O. So now he becomes a C.E.O. and he finds his number two guy, a little dumber. Sooner or later we’re going to be run by morons. We are not far from that now. It’s a sad commentary on our country.
So when you go out there, you can be one of two kinds of
moving ahead. A lot of you are real smart kids and i see you’regetting four averages and that’s pretty impressive to me. You can be a guy that thinks for yourself and i think the world and our corporations are now waiting for that.
There are two kinds of guys they say.There are C.E.O.’s that really do think for themselves and are innovative. They go against the trend. I’ve had a few, shall we say,tiffs with Bennett Lebow.We’ve had a fewaltercations but BennettLebow is one of the guys that you should try to be like becauseBennettLebow never put up with that stuff. Bennet and I would talk about it. I’ve always respected Bennett becausewould go in there and he would go against the trend, go against the board. He’d go against the people there.
That is whatyou should seek to be when you go outinto the world. You should try to stand up against the trend.